Tag Archives: gap

Failed Breakout of Monday’s Balance, POC Migrated Lower

With overnight inventory almost 100% long, the ES gapped open higher Monday. Market participants also got long off the open, there was no early correction to long overnight inventory.

return-to-poc

Price repaired the 9/15 poor high at 2144.25 in A period, traded 2 points above it and the overnight high in B period but fell short of filling in the single print at 2147.50 from the 9/12 short covering rally. B traded lower and bounced exactly from the half back level, hinting that it was not strong buying in the market but more short/day timeframe traders.

Although value was developing higher on the day and a five TPO wide POC was developing at 2142.75, the pace of the session was very slow and volume was lower than the previous day. Carrying forward Monday’s wide POC at 2128.75 and poor low at 2123.00, long short term inventory combined with developing poor structure from the C/D/E bar lows suggested a liquidation break was possible.

When F period failed to trade above the E period high the market broke, trading through the C/D/E lows, probably hitting stops. Momentum traders piled on driving price lower, initially bouncing two ticks from Monday’s gap fill but trading through it in G period, forming a lower distribution.

Price reenterd the previous day’s range for a second time in H period accelerating lower through the previous close, overnight low and one point through Monday’s prominent POC, one timeframing lower in F, G, H and I periods before rallying/short covering off the low and Monday’s prominent POC.

K period closed the upper distribution, but the market sold again from the K/L high, exactly at the opening print, and closed back within the previous range.

Value ended the session overlapping to higher, but the POC migrated lower from an earlier five TPO wide 2142.75 to six wide at 2133.75.

Because the K/L period highs were exactly at the opening price, that level could be considered a weak reference and could have good odds of being tested on Tuesday (value did not end lower). But considering the market closed within the previous range after a gap higher opening, and the point of control migrated lower during the trading session, there are also good odds the market will test lower. Failure to find acceptance above Monday’s close and point of control could bring lower references in play, like Monday’s poor low at 2123.00 and beyond, as noted in Sunday’s Market Profile post.

If price is accepted above Monday’s close/POC, monitor developing value and one timeframing for continuation.

Comments Welcome!

(the above post and every post on es-traders.com is an interpretation of market generated information using the Market Profile, and the information contained within is to be used for informational purposes only and not to be construed as investment or trading advice. Please read our disclaimer)

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Another new all time high in the S&P eminis

ES-new-alltime-high-july14-2016

After the fourth gap higher opening in the past 5 trading sessions, and another new all time high set at 2168.00 during the 25 point overnight session, the ES opened 14 points above its previous close but couldn’t manage more than a 10 point range during pit session trading hours. Three of those gaps remain unfilled.

In the opening 30 minute market profile ‘A’ period the ES traded down exactly to the half back level from the overnight session, and the lower end of its upper distibution (a very visual, mechanical short term traders reference level), before “rallying” 8 points to set another new all time pit session high at 2163, five points shy of the overnight high.

From C period the market one timeframed lower for 7 consecutive periods, eventually taking out the previous weak A period low in H period but did not form a second, lower distribution and re-entered the earlier initial balance. The bounce off the lows left a poor low (just one tick of excess between the H and I periods).

Thursday’s profile is in balance. The wide point of control at 2157.50 and the late rally L/M period high at 2160.75 could be short term trading references for Friday.

If price takes out Thursday’s poor low and accelerates lower, the top of the previous two day balance from 7/12, 7/13 at 2150.75 comes into focus, acceptance back within that range could easily target the wide naked point of control at 2145.25 and the lower end of that two day balance at 2138. To the upside, the new all time high made in the after hours market at 2168 could be revisited.

The market is still in rally mode from the Brexit lows, with the daily chart one timeframing higher for seven consecutive periods, while the weekly chart is one timeframing higher for three. There is the potential for the monthly chart to finally show meaningful excess for July, but that won’t be determined until trading begins in August.

Thursday’s overnight session could have some volatilty as Chinese GDP, Retail Sales and Industrial Production reports are scheduled to for release.

Friday is also a busy day for the U.S. economic calendar as Consumer Price Index, Retail Sales and Empire State Manufacturing Survey reports are due out at 8:30 EST, with Business Inventories and Consumer Sentiment at 10:00 AM EST.

(the above post and every post on es-traders.com is an interpretation of market generated information using the Market Profile, and the information contained within is to be used for informational purposes only and not to be construed as investment or trading advice. Please read our disclaimer)

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Gap open 25 points higher from previous close

25 point GAP higher from previous close

After gapping higher 25 points overnight and continuing with an 8 point climb higher after after the opening bell to 2092.50 , the ES failed to gain acceptance above the previous week’s high, broke out of an inside bar balance in D period and one timeframed lower for most of the remainder of the day, selling off into the close, but failing to fill Friday’s gap. Large gaps are seldom filled on the first day after they’re created. Value was clearly higher on the day.

Early trading references for Tuesday could be the base of the late day spike at 2080.75, and the 9 TPO wide POC at 2084.25. Acceptance above 2089.75 could target Monday’s high, then the previous poor high at 2094 from 6/10/16, followed by the unfilled gap above that at 2097.25.

On the downside, there is still a very prominent ‘naked’ point of control from Friday 2061.50.

(the above post and all posts on es-traders.com is an interpretation of market generated information using the Market Profile, and the information contained within is to be used for informational purposes only and not to be construed as investment or trading advice. Please read our disclaimer

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